Trade News

Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

Tech takeover

There’s no stopping technology. From voice assistants to blockchain, here’s a look at some of the innovative tech that, if it isn’t already, may one day disrupt the business of selling food.

Voice assistants

Anyone who talks to their smartphone to send a text or get information can attest to the convenience of voice technology. No pushing buttons or looking at screens. No scrambling for pen and paper.

It’s no wonder, then, that voice assistants are talking their way into grocery shopping as well. Case in point: retailers such as Walmart and Costco have partnered with Google to introduce voice-based shopping to their customers. Last year, Morrisons was the first major grocer in the United Kingdom to integrate Amazon’s Alexa into its online service so shoppers could make their weekly shop using voice commands.

According to the latest research from consulting firm Capgemini, we can expect the adoption of voice assistants to keep on growing. Its 2018 report, Conversational Commerce, Why Consumers are Embracing Voice Assistants in Their Lives, showed 40% of people expect they will be using voice assistants instead of a website or mobile app in the next three years. In fact, the data already shows 35% have bought products such as grocery items via voice assistants.

Aside from the convenience, the real opportunity of voice assistants for grocers will be in having an ongoing record of customer behaviour, says analyst Brian Kilcourse, managing partner at U.S.-based Retail Systems Research. “They’re dropping digital breadcrumbs [with each interaction] that can help retailers on the other side detect what they’re interested in,” he says. “This can then become a digital path towards purchases before they happen, instead of just transactional data.”

To truly take advantage of all of this additional data, he says retailers need networks powerful enough to support “all that noise,” and analyze where the trends are.

With new competition from online giants such as Amazon, Kilcourse says retailers will have to “up their game” in terms of the in-store food shopping experience, and voice assistants could be the key. He points to having product codes that shoppers can scan to hear more about the origins of a product or the ingredients listed in small print. Another option could be for shoppers filling prescriptions at the grocery pharmacy to get instructions read in their native language via voice assistants. “The potential for all of this is possible with artificial intelligence,” he says.

Robots

Once the fodder of sci-fi movies, robots are steadily making their way into grocery as retailers look to faster, more efficient ways to run their businesses.

The U.K-based online supermarket Ocado—which just inked a deal with Sobeys to bring its e-commerce platform to Canada—is a prime example. Ocado operates a warehouse that uses cloud-based technology and swarm robots to collect grocery orders. Meanwhile, Walmart has been testing two-foot-tall robots on wheels in a number of U.S. stores. These machines use artificial intelligence (AI) to scan for incorrect prices or missing labels. The company reported that the robots were 50% more productive and could scan shelves three times faster than humans.

Last year Schnuck Markets, a U.S. chain of grocers founded in Missouri, conducted a six-week pilot at three of its stores using a robot called Tally. Its job was to scan the aisles three times a day to check stock and ensure each product was placed with its appropriate shelf tag. The data collected by Tally was then used to help the company keep on top of having the right products on shelves at the right time.

Schnucks’ spokesperson Paul Simon noted that customer reaction to Tally was mostly indifference. “Every day, customers are surrounded by more and more advancing technology in all aspects of their lives, and the supermarket is really just a part of that.”

Gary Saarenvirta, the founder of Toronto-based technology firm Daisy Intelligence, says robots can certainly be useful in tracking or re-stocking shelves, as well as in improving warehouse efficiencies. But he sees the bigger value-add for grocers in the potential to improve merchandising and inventory management via AI-based operational systems. “Sure, the big retailers may be using drones and robotics, but at a cost of several billion dollars, most retailers won’t waste their time on that,” he says.

Instead, Saarenvirta sees the greater impact of AI, especially for mid-market grocers, will be in using it to create better systems for inventory allocation and merchandise planning. “That’s the secret sauce these bigger retailers are already using and aren’t talking about,” he says. “Right now grocers are having to eat costs to stay competitive, but being able to pick the right products to promote at the right price points, with the right inventory at the right location—that’s the big benefit.”

Aaron Cheng, vice-president of product development at Toronto-based digital market firm Flipp, says the ultimate goal is to use AI to help grocers be more relevant to their customers. “Showing someone who is health conscious not just the cheapest chicken but [also] when the organic chicken is on sale would be much more meaningful to them,” he says.

Blockchain

The technology that powers Bitcoin is currently showing big promise for the grocery sector as well. Blockchain is essentially a shared, encrypted ledger that stores and shares information in a peer-to-peer network. The technology allows users to view real- time data and transactions, permanently recorded into files called “blocks.”

“Blockchain technology will provide complete transparency, integrity and authenticity to retailers, allowing them to see items move through the supply chain every step of the way,” says Judy Fainor, chief architect at management software company Sparta Systems.

“Because ledger entries in the blockchain are time-stamped and immutable, the data on product production, transportation, storage conditions and delivery is verified and available to all parties with access. This type of visibility and traceability helps retailers ensure the quality of their product while reducing fraud or counterfeit attempts.”

Blockchain would be particularly valuable for the produce sector. “In our world, we don’t have a very linear supply chain. It’s more like a supply web,” says Ed Treacy, vice-president of supply chain at the U.S.-based Produce Marketing Association (PMA). “There are so many different entities—from a grower to a shipper to a packer—and so many paths the product can travel.”

One key benefit of blockchain is that it allows for near-instant traceability. In a proof of concept, Walmart tested blockchain technology for sliced mangoes. Without blockchain, it took six days, 18 hours and 26 minutes to trace a package of sliced mangoes back to the original source. With blockchain, it took 2.2 seconds.

In a webinar hosted by PMA, Frank Yiannas, vice-president of food safety at Walmart, said, “What we’ve been able to achieve is food traceability at the speed of thought.” He added that being able to identify a potentially contaminated product in 2.2 seconds could prevent a lot of illness that would occur over seven days.

But for Walmart, traceability “isn’t the end game,” said Yiannas. “It really is transparency.” For example, with blockchain, Walmart would be able to see audit certificates from the farms and hot water treatment certificates from the packer.

“[You can] get documents that are relevant to production, that show you not only data attributes related to traceability—what, where and when—but more importantly, how was the product produced,” said Yiannas. “This idea of transparency has the potential to be a game-changer for food and certainly for the produce industry.”

Yiannas said Walmart has joined IBM and nine other companies, including Driscoll’s, Dole, Unilever and Kroger to form a coalition that will further pilot, test and scale blockchain.

Sylvain Charlebois, dean of the faculty of management at Dalhousie University in Halifax, says blockchain’s potential for the grocery sector depends on the buy-in. “Blockchain is an excellent technology and an excellent concept, as long as everyone buys into it,” he says. “Walmart has bought into it, but Walmart is Walmart. I couldn’t see a producer or a processor on his or her own adopting blockchain and pushing everyone else to do the same.”

Sparta Systems’ Fainor says it will still be a while before we see the leap to widespread adoption in sectors other than financial. “Compliance, regulations and standardization are all concerns to be further addressed,” she says. “[However], as the technology matures and standards are formed over time, the adoption of blockchain will soar.”

Lab-grown meat

Once a futuristic idea, lab-grown meat (also called clean meat or cultured meat) is now a real-world innovation that’s gaining traction. Around the globe, food-tech startups are making inroads in creating meat from animal stem cells, without the need to raise and slaughter animals.

San Francisco-based Memphis Meats announced a few “world firsts” over the past couple of years, including a beef meatball and crispy chicken strips made from animal cells. Israel-based food-tech startup SuperMeat is working on developing lab-based chicken. And San Francisco Bay Area startup Finless Foods is working on producing lab-grown Blue fin tuna.

Matt Ball, a spokesperson for The Good Food Institute, a U.S. non-profit that promotes meat alternatives, says clean meat is gaining traction because of two converging factors. “First, there is a growing awareness of the problems associated with how meat is currently produced,” he says. “Secondly, there are rapid advances in cellular agricultural technology.”

Proponents of lab-grown meat say it’s more sustainable and environmentally friendly than conventionally grown meat. “Right now, we get our animal products from animals that are mostly born and raised in the factory farming system, which is extremely hard on the environment and on the animals themselves,” says Erin

Kim, communications director at New York-based New Harvest, a donor-funded charity that invests in cellular agriculture research. “In theory, the hope is that [lab-grown meat] will require fewer resources and will produce less waste. Because it’s yet to be done at a large scale, it’s still speculative, but it offers a very promising hope.”

Once extremely expensive to produce, lab-grown meats have come down significantly in cost, although there’s still a long way to go. In 2013, Mark Post, a Dutch scientist and co-founder of Mosa Meats, unveiled the world’s first lab- grown burger, which cost $325,000 to develop over two years. Memphis Meats CEO Uma Valeti told the Wall Street Journal in 2017 that his company can make a pound of meat for less than $2,400, down from $18,000 in 2016.

“It’s got immense potential once we get the economics to work,” says Mike von Massow, associate professor, food agriculture and resource economics at the University of Guelph. “More people are concerned about the environmental footprint of meat production and if we can do this cost-effectively, it becomes a reasonable option.”

That said, putting lab-grown meat on the dinner table is still a long way off. Ball says the first clean meat products will probably be in high-end restaurants within five years. “It will simply be a question of scaling production before these products reach grocery stores,” he says.